Banque Misr and Al-Ahly of Egypt will start disbursing the dues of the 18 certificates, with the entry into a working day tomorrow, Wednesday, March 22, after the completion of their one-year deadline.
The two banks issued the 18% certificates after an extraordinary meeting of the Monetary Policy Committee at the Central Bank on March 21, during which it raised interest rates by 100 basis points on banking operations, from deposit and lending, to 9.25% and 10.25%, respectively.
The issuance of the 18 certificates by the National Bank and Banque Misr coincided with a new devaluation of the pound against the dollar by 15.95%, or about 2.5 pounds, from the level of 15.74 to 18.25 pounds.
As a result of the issuance of 18% certificates, Banque Misr and the National Bank of Egypt were able to collect an estimated proceeds of 750 billion pounds, which came as follows: 510 billion pounds in the National Bank and 240 billion pounds in Banque Misr, after offering them on March 21, 2022 and stopping the offering on March 30 of the same year.
30% new certificates
Mohamed Badra, a banking expert, expected, in exclusive statements to “The Week”, that Banque Misr and the National Bank of Egypt will move towards offering new savings certificates during the current week, when the 18 certificates will be disbursed, with interest rates ranging between 25% and 30%, in order to control the exit of liquidity. The certificates of the 18 from within the two banks to the local market, which will raise inflation rates if they exit after the increase in the cash in circulation in the hands of citizens, which paves the way for large-scale purchases of foodstuffs and other commodities, and thus inflation rises again, which is already recorded at its highest basic rate in Egypt at 40.3%. By the end of last February.
Central bank decision
The banking expert attributed his expectation that the issuance of the 18 and 25% certificates was due to the withdrawal of cash liquidity from within the local market to combat the pace of increase in inflation rates inside the country, which at that time recorded 10%, which is a low rate when compared to the current rate at 40.3%, referring to That the banks may receive, during the coming hours, a decision from the Central Bank to issue new savings certificates before the meeting of its policy committee.
Badra noted that the liquidity of the 750 billion pounds collected under the 18 certificates in Banque Misr and the National Bank of Egypt may inevitably face difficulty in the event of its exit from within the sector due to the absence of these quantities liquidated in cash inside the sector, explaining that most of it is still within the scope of employment, especially in treasury bonds and bills. Government debt instruments, and therefore the two banks will resort to preventing these quantities from flowing out of their sector by issuing new certificates with attractive returns.
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